Bei­jing stores cut gold prices on slump

The big­gest weekly slump in the global gold price led Bei­jing’s gold stores to cut their prices for the first time this year. The price in Bei­jing de­clined by 10 yuan ($1.5) per gram on Sun­day. This was the first cut, fol­low­ing six ear­lier price in­creases this year.

Gold had the big­gest weekly loss in more than three years as in­vestors de­bated prospects for higher US rates.

In China, prices de­clined as trad­ing restarted after a week’s hol­i­day. Bul­lion of 99.99 per­cent pu­rity slumped 4 per­cent to 273.6 yuan per gram on the Shang­hai Gold Ex­change at 15:30 on Mon­day.

Huang Liang, a gold an­a­lyst at Guo­hua Jew­elry, said the price cuts by Bei­jing’s gold stores were within ex­pec­ta­tions.

“There’s a stronger ex­pec­ta­tion that the US Fed­eral Re­serve will raise rates in De­cem­ber, so the dol­lar is ris­ing and gold price is de­creas­ing,” saidHuang.

Yu Guiy­ing at Bei­jing-based All Love All Life Gold Store said their jew­elry busi­ness­was not in­flu­enced by the global price slump, and the price re­duc­tions at Bei­jing’s gold stores from Sun­day would fur­ther pro­mote their sales.

“But it is true that peo­ple are less in­ter­ested in pur­chas­ing gold bul­lion as an in­vest­ment prod­uct,” said Yu.

Gold­man Sachs Group Inc said on Thurs­day that a drop in gold prices sig­nif­i­cantly be­low $1,250 per ounce would present in­vestors with a strate­gic buy­ing op­por­tu­nity, with the metal of­fer­ing pro­tec­tion against risks to global growth and the lim­ited ef­fec­tive­ness of cen­tral banks.

China's of­fi­cial gold re­serves stood at 18.4 mil­lion met­ric tons in Septem­ber this year, up 74 per­cent from that in June 2014, ac­cord­ing to data of the Peo­ple’s Bank of China.